Through our consulting and coaching, and our curriculum and technology, we have been able to provide a sound business framework that is scalable and predictable to the Fazoli’s team. I want to point out here that the ONLY reason it is working is because of the leadership and franchisees at Fazoli’s. They are leveraging it properly and are applying it methodically. This is yielding exemplary results.

Yesterday, Fazoli’s put a statement out to the marketplace that they are doubling down on technology and catering. I am not posting it here to boast, but simply to call out that because of Carl Howard’s leadership and the conviction of his whole team, they are moving the needle for their franchisees in a meaningful way.

For me, it’s always been about the people and I am blessed to be able to work with the leadership team at Fazoli’s.

OK. I am going to upset a lot of people with this post tonight. I’ve been at this for far too long and have watched our customers work way to hard to grow their restaurant companies. And so, I’m throwing my hat into the ring on this 3rd party delivery issue.

As a restaurateur, are you feeling confused about your options of how to handle 3rd party delivery services? Are you being bombarded by Doordash, Postmates, UberEATS and so many other providers promising you the moon? Promising you more sales?

Well, good luck with all that! It’s a shakedown! None of these services are adding value or growing your sales. It’s a ticking time bomb.

Need more? Check out these employment reviews about Doordash one of the darlings of the industry. That’s a whole lot of bad will right there. These are the people that are delivering your brand to the consumer. Do you really want your restaurant to be reflected this way?

None of these companies seem to care about your restaurant operations. If they did, they would appreciate how complicated they are making things for restaurants. As a matter of fact, they are working hard to further disrupt your restaurant operations, and they are taking a piece of the action while they do it. And because this is a technology play, people will get super rich in the process. This has Dot Com all over it. The business model is doomed.

Well, I am really concerned about where this is going. It’s a runaway train and it’s going to create dismal economics for our industry. A lot of restaurant companies are going to go out of business in the process.

Let me share with you that I have worked in restaurants for more than 20 years. And I can tell you, delivery for takeout is (and always has been) a challenge.

If you look at the math, you will actually see that with this scheme, you are splitting 50% or more of your gross profit with these services. It’s just not affordable.

Now, I can tell you from experience that with a gross margin this dismal, it is impossible to make any money on this transaction. In fact, I might argue that you will lose money on this transaction and you are better off not taking the business. This is steep discounting. It’s not going to work.

So go ahead! Ramp up your takeout delivery business with these 3rd party players and watch your profits fly out the back door. Watch your customers walk out the door and watch as you lose total control over your takeout business. BEWARE!

Here are some additional facts:

The customer is not yours. The customer belongs to the 3rd party delivery company. The orders are being placed in their database and systems.

Depending on your agreement, the more you pay and the more transactions you allow, the higher your listing and more visible your restaurant is on their websites. They will drive more “non profitable” business your way.

If you want to deeply discount your products and quickly cannibalize your sales, sign up for these 3rd party delivery services today. It’s a sure way to lose your money, and fast. Oh, they will bring you a “ton of sales”. Thats for sure. But you will lose money on each one. Good luck with that.

Delivery for takeout has always been a challenge because the cost of distribution is prohibitive. Delivery for catering works because the order values make sense. You can afford to absorb the cost of distribution when an order is a few hundred dollars.

This topic is complex. My recommendation for restaurants is that they should focus on the basics. Do what you do well. Focus on your core business strategies and don’t run head on into a technology gold rush.

If you want to do delivery, then do it yourself. Do a good job. Take good care of your customers and just do a good job. Pizza operators have done that forever. Just ask them.

Focus on a solid catering and takeout program and take care of the last mile yourself.

I always knew in my own heart that catering out of restaurants was a HUGE opportunity for the brands that really decided to take it seriously. And the data is presenting positively towards this belief.

Next year I will celebrate my 20th year since entering the foodservice space and I am just as excited and bullish about our industry as I was n 1996, when I acquired Tony’s Deli & Catering Company.

As I traverse North America and work with the greatest restaurant and foodservice companies in America, I am left with a feeling of optimism and hope. In fact, I am so certain that the work we are doing is changing the way our community operates, that I can’t wait to see what the next decade brings.

It’s going to be a fantastic ride!

I am grateful today to the team members that I am blessed to lead forward, and even more grateful to the more than 5000 restaurants and their teams that have placed their trust in our organization and for believing in our dream of helping restaurants to feed their customers where they Live, Work and Play.